Often times your business is losing sales not to your direct competitors, but, to the other businesses you knew nothing about or you didn’t believe would be competing with you.
A certain giant beverage drink manufacturer [name withheld] was in a similar quagmire a long time ago. It discovered that its products sales were drastically low and the management thought that their competitors were having an upper hand in the market. When they invited a business consultant to look into their dilemma, then did they find out that their major competitor has been –WATER and not their competitor’s products!
Many entrepreneurs are still myopic in their competitor analysis…albeit unknowingly.
The reasons are not farfetched. Here are a few:
- You are focusing on your direct competitors without taking into cognisance of other businesses who may be your indirect competitors.
- You are like always “all things” to your business and hardly have the time to gather market intelligence needed to craft marketing strategies
- You are yet to adopt marketing in your business operations
Even the big and established brands need to find a way to figure out who their indirect or distant competitors are.
If you asked McDonald’s who its competitors are you’re likely going to hear Burger King and Wendy’s. But if they look deeper they would identify Pizza Hut, Taco Bell and Subway…they might miss supermarkets that carry prepared foods.
The same is true with US steel.US steel might only consider Bethlehem steel and maybe Nucor [non integrated steel manufacturer] as its main competitors. But it has to pay attention to the aluminium and plastic industries too! Why? You may ask. Because aluminum and plastics are cheaper alternatives to steel and are being used by auto makers to replace steel components in their automobile assembly plants.
So the question is…how can you a small business owner or even established businesses get to define and monitor your competitors?
Here are a few strategies you can use.
Develop A Market Intelligence Department
Sounds queer right? I bet it does…however,just like no Army General would go to war without a reconnaissance team,you too should not dabble into business without a plan to gather market intelligence.
To do this you either get someone from your team and give the person the sole responsibility of managing market intelligence or you create a department for that. This you can do by researching your competitors online or going to the field to gather market intelligence. The intelligence gotten from this research would help you to craft appropriate strategies in response to business stimuli or to help in formulating your own growth strategies.
Be Conscious Of New Technologies
Many entrepreneurs are usually cut off guard by disruptive technologies in their industries. Again, this could be because your system for researching industry trends is weak or there is no system in place in the first place. Being able to identify relevant technologies in your industry early and planning towards investing in them would help position your business as a go-to brand for contemporary products or services.
One way to stay updated is to attend industry trainings or seminars and by constantly reading industry magazines and newsletters.
Develop Offerings Similar To Those of Your competitors
Many times new entrants to an industry come to the market with similar products that are already in existence in that industry.While this is not a great product launch strategy…you could adopt the same strategy if you enjoy a certain price point in your industry and your competitors attack your price position with a lower priced product.
You could develop a similar product with the same features of those of your competitors so as to allow your premium product to maintain its market share without being affected by your competitor’s low pricing strategy.
Hire Away From Your Competitor
This is an unpopular strategy. But the merits are too enormous to be neglected. Imagine you are just starting a business and you have only a fair knowledge of your industry…what better way to start than to poach your competitors’ staff by offering higher wages, positions or better work conditions. This will allow you get access to resource persons that have the requisite skill set and experiences needed to grow or run your business.
Kindly note that I AM NOT ADVOCATING YOU STEAL YOUR COMPETITORS TRADE SECRET from your new hire [if you do you’ll be sued and prosecuted…stay off that!].
Once you adopt any of the above strategies, you’ll become comforted around your competitors knowing very well that you are acutely aware of their moves and counter moves.